Humphrey Yang regularly shares personal finance tips on his TikTok account, @humphreytalks. Recently, he went viral for revealing a common marketing tactic that retailers use to get customers to spend more money.
Most of us are blissfully unaware of this marketing trick, but thanks to Yank, we can all be aware.
In his video, he demonstrates the tactic by asking a “customer” if they would rather purchase a large coffee for $6 or a small coffee for $2. Most would snag the small coffee, as this appears to be the better deal. However, Yang reveals a third option that muddies the waters a bit: a medium that can be had for $5.50. With the medium price being $5.50, it makes the large price of $6.00 seem like a great deal and encourages the purchase of the larger item
“Now the large is a really good deal because it’s only 50 cents more than the medium,” says Yang in the video. However, in most instances, the small option is the best deal. For example, the customer could buy two $2.00 coffees for a total of $4.00, and they’d usually get more coffee than the $6.00 large provides. In fact, those who buy two small coffees for $4 are always going to take home beverage than those who purchase the large for $6.
The purpose of the video is to educate consumers and make them aware of the “decoy” product. Watch the video for yourself below:
@humphreytalks Would You Fall For This?? 😳